Demographic challenges ahead

The changes in demographics that have been of concern in the western world have recently been exacerbated by the financial crisis. The growth in public debt has inevitably increased the focus on the long- term sustainability of budgets and, hence, the planning made at national level to ensure that pension, social security and healthcare systems remain adequate and sustainable.

With respect to budgetary frameworks and surveillance, the European Commission has very recently proposed the Economic Governance Package (EGP) of which I am the rapporteur for the Committee of Employment and Social Affairs Committee.

The principal tool at EU level for implementing treaty provisions on budgets is the Stability and Growth Pact (SGP), which the EGP aims to strengthen to be able to hold member states accountable when they default in their obligations. This is especially necessary in the eurozone where instability in one member state has inevitable consequences on other countries having the same currency.

As rapporteur, I am in the process of establishing the position of the Committee of Employment and Social Affairs on these dossiers. We are attempting to ensure the sanctions that could be imposed due to the reinforcing of the SGP do not target structural funds that have been set up for the benefit of individual citizens. The EGF, for instance, is intended to provide aid to workers who become redundant. It would be incredibly counterproductive to deny this aid to those who lose their job at a time when finding alternative employment could only be more challenging. In addition, we are proposing that budgetary frameworks must take cognizance of changing demographic realities and ensuring medium- and long-term budgetary objectives are realistic and sustainable. Another issue is that of pension systems where the Commission has also very recently issued a Green Paper to trigger a debate on possible future proposals. The Green Paper in no way suggests there should be a harmonised system in all member states but that certain basic standards of best practices should be identified and adopted.

In order to address these issues, the European Demographic Forum was set up in 2006 and holds a conference every two years. The objective of the Forum is that of giving policymakers, stakeholders and experts the opportunity to share their knowledge, identify best practices and the best possible way forward.

Also in 2006, at EU level, the main policy challenges were identified. These include the reconciliation of work and family life, boosting employment, enhancing productivity and economic performance and ensuring sustainable public finances that guarantee adequate pensions and healthcare.

Despite all of these efforts, I am of the opinion we need to go back to basics and ensure prevalent demographic trends, especially with regard to lower birth rates, do not continue declining. For these reasons, measures should be taken throughout the EU to reinforce the family unit.

Regrettably, having a family has become somewhat of a challenge in modern times where owning property and providing for education and healthcare have become incredibly costly. In the UK, for instance, we have seen a sharp increase in tuition fees, meaning that when citizens complete their studies they will already be burdened with debt, possibly running into thousands of pounds.

Thankfully, in Malta the government continues to protect these essential services. So far – remarkably – we have weathered the storm of instability that has plagued our European neighbours. Nevertheless, the reality is that changes will also need to be made to our systems should we wish to ensure our financial health is maintained.

The author is a Nationalist member of the European Parliament.